Reverse Exchanges Gain Appeal
In Strong Real-Estate Market

By
Ray A. SmithStaff Reporter of The Wall Street Journal

Updated Feb. 26, 2003 12:01 am ET

Buy now, sell later.

Last week, Apartment Investment & Management Co., a big publicly traded apartment owner, did just that, conducting what is known as a reverse exchange. Reverse exchanges are variations on 1031 exchanges, transactions in which owners defer gains on the sale of a property by effectively exchanging it for a "like-kind" property -- tax-code language for a property of roughly equal value. By doing either traditional 1031 exchanges or reverse exchanges, sellers are able to put off paying capital-gains...